sole proprietorship with respect to my PERSONAL books?

[Paul Elliott]

On Thu, Feb 14, 2013 at 09:40:10AM -0500, jcard21 xxxxxxx wrote:
> EVERY transaction between your PERSONAL and BUSINESS entities, no
> matter in which direction, you need to give a separate logical
> accounting reason for the transfer.
> 
> When you can answer these questions (we cannot answer them for you),
> then you will know how to set up your gnuCash accounts to account for
> these transactions.
> 
> I truly hope this helps you.
> 

OK, Say it's a lawn-mowing business, when it started, all its
accounts had $0 in them. But the business had to buy a lawnmower,
but there was not initially any money in the business accounts
to buy a lawnmower. So X dollars was initially moved from personal
accounts to business accounts. Then later a check could be written
on those business accounts to buy a lawn mower. And a separate purchase
of gasoline on the business's debit card.

On the business's books, one side of the transaction was the business
bank account, but the other side was "Opening Balances" under Equity.
I get all that.

But on the personal books, the X dollars that disappeared from
personal bank accounts to fund the business, what is the "other side"
of that transaction? This one of my questions.

Later, the business accounts have accumulated a great deal of money.
Because of a lot of lawn-mowing.  More than enough to buy gas, or
repair the lawn mower.

But the personal accounts are low and the owner wanted to take his
girl friend out on a date. It was anticipation of this situation and
others like it that caused the lawn mowing business to be started in
the first place.

So Y dollars got transferred from lawn-mowing business to personal accounts.
That way, when the owner used his personal debit card to pay for the date
the bank did not complain.

On the books of the business, one side of the transaction was a lawn-mowing
business bank account and the "other side" was owner draw.

But on the owner's personal books, one side of the transaction was a
personal bank account, but the other side was WHAT? This is my other
question.

All of the time that the owner was lawn-mowing, he was thinking about
his girl friend and how the date would go. I am afraid the owners thought's
were not very logical. But even though the owner was not logical, he
did the transfer anyway. He said, correctly, "it is all my money".

It is only the possibility of illogical dates, that kept the lawnmower
moving.

This is a very common situation. There are many sole proprietorships.
There must be standard answers for my questions.


-- 
Paul Elliott                               1(512)837-1096
pelliott at BlackPatchPanel.com               PMB 181, 11900 Metric Blvd Suite J
http://www.free.blackpatchpanel.com/pme/   Austin TX 78758-3117
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